Question

Help ASAP

Answer 1

The amount of ​$25.00 billion will be the private investment spending that each​ $10 billion increase in government spending will crowd​ out.

What is the explanation on government expenditure?

When the government expenditure increased by​ $1 billion, the planned investment expenditure will falls by ​​$0.20 billion., hence, for each​ $1 billion increase in government​ spending, there is a net change in intial spending​ of $0.2 billion

Also, the aggregate demand curve will shift to the right by the net change in spending multiplied by the​ multiplier, which equals 1- MPC.

Hence, the net increase in AD due to the​ $1 billion increase in government expenditure is equals what is known as the net multiplier.

Therefore, the amount of ​$25.00 billion will be the private investment spending that each​ $10 billion increase in government spending will crowd​ out.

Read more about government expenditure

brainly.com/question/14786578

#SPJ1